The state-owned power utility, Nepal Electricity Authority (NEA), has received in- principle approval from the Millennium Challenge Account Nepal (MCA-Nepal)—a special purpose vehicle formed to implement the projects under the Millennium Challenge Corporation (MCC) compact, to construct a part of the Nepalese section of the 400 kV New Butwal (Nepal)–Gorakhpur (India) cross-border transmission line.
NEA had requested MCA-Nepal for permission to develop the 18-km-long section of the project from New Butwal to the Indian border, in August 2022. Originally, the section was supposed to be constructed by MCA-Nepal. However, NEA was concerned regarding the timely completion of the transmission line and therefore sought to undertake the construction itself. The project is an important part of the MCC compact, under which MCA-Nepal is responsible for constructing a 315-km, 400 kV double-circuit transmission line in five sections—the 18-km-long New Butwal–India border, 90-km New Butwal–New Damauli, 90-km Damauli–Ratmate, 58-km Ratmate–New Hetauda and 59-km Ratmate–Lapsephedi. NEA wants the Nepal section of the cross-border line to be completed simultaneously with the Indian side, which is supposed to be completed in the next two years. Power Grid Corporation of India Limited and NEA have established a joint venture company to construct the transmission line on the Indian side, and the new company has already issued a tender to hire a contractor.